GKN owner hails progress after £8.1bn takeover

GKN owner Melrose is “pleased” with how the aerospace and automotive group has performed since the £8.1bn takeover completed in early 2018.

The deal came with plenty of controversy and concerns about Melrose’s plans for the business.

The latest financial figures, revealed this morning, showed a significant improvement in profitability. Adjusted pre-tax profits – which didn’t include a number of non-trading and non-cash items – were £429m on revenues of £6.0bn.

However the period, for the six months to June, make direct comparisons difficult because it isn’t against a full period of GKN ownership a year earlier.

Melrose chairman Justin Dowley

Justin Dowley, who became Melrose chairman in January, is positive about the progress that has been made.

He said: “Having owned the GKN businesses for just over a year, we are pleased with how they have responded to our initial investments and initiatives.

“GKN Aerospace revenue grew strongly in the period with decisive operational improvements also made, delivering a significant increase in profit.

“While the global automotive sector downturn is affecting the GKN Automotive and GKN Powder Metallurgy businesses, we are pleased with their performance against the challenging market backdrop.”

Earlier this week Melrose confirmed a major restructuring of its Aerospace business, with the launch of a global operating model that it expects to result in 1,000 job cuts. GKN Aerospace is already the biggest contributor to Melrose’s profits.

“There is an opportunity to improve this division so that it achieves its potential,” said Melrose chief executive Simon Peckham.

“This will overcome the previously fragmented structure and move it to a truly global integrated business ‘One GKN Aerospace’. We see this as a key stepping stone in the ongoing improvement and performance of this division.”

The group has also made a number of changes in its Automotive and Powder Metallurgy businesses to respond to the downturn in the global automotive market, including the closure of its German production facilities.

The group remains “positive about the prospects for the rest of 2019 and beyond”, said Dowley.

He added: “We are on track to improve the performance of our businesses, driven by continued and significant investment in operational improvement projects, and backed by stronger cash management and cost control, customer delivery and management accountability.”

Close